## GZTT Fifth Meeting (April 5, 2022)—Summary of Discussions

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**Canonical URL:** [GZTT Fifth Meeting (April 5, 2022)—Summary of Discussions](https://www.imf.org/-/media/files/data/statistics/bpm6/gztt/gztt-meeting-minutes-april-5-2022.pdf)

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### Introduction
- The event was held virtually on April 5, 2022.
- Co-chairs Michael Connolly and Branko Vitas thanked the team for collaboration since April 2019, when the Task Team was initially established by the Intersecretariat Working Group on National Accounts (ISWGNA) and later became an official joint task team with the IMF Committee on Balance of Payments Statistics (Committee).
- The GZTT has worked under a research agenda to address cross-cutting research issues involving both national accounts and balance of payments compilers.

### Overview of the Research Agenda
- The co-chair reported that the GZTT has "almost completed" its work agenda.
- High-priority topics and status:
  - G.1 Valuation of imports and exports (CIF-FOB adjustment) — Awaiting final BOPCOM/AEG endorsement.
  - G.2 Treatment of MNE and Intra-MNE Flows — Awaiting final BOPCOM/AEG endorsement.
  - G.3 Transfer pricing within MNE group — Subsumed under GN G.5.
  - G.4 Treatment of special purpose entities and residency — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
  - G.5 Economic ownership and recording of intellectual property products — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
- Medium-priority topics and status:
  - G.6/C.4 Merchanting and Factoryless goods producers and recording of their transactions — Awaiting final BOPCOM/AEG endorsement.
  - G.7 Global value chains and trade in value-added — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
  - G.8 Typology of global production arrangements — Part of GN C.4.
  - G.9 Payments for “knowledge-based capital” — Approved for testing at the joint BOPCOM/AEG March 2022 meeting.
- Collaboration and endorsement process:
  - Two GNs (G.4 and G.5) were approved at the March 2022 joint Committee/AEG meeting.
  - G.1 and G.2, already discussed in October 2021, will be circulated for final approval of the Committee and AEG.
  - GN G.6 was drafted jointly with CATT’s GN C.4.
  - GN G.7 recommendations were endorsed at the March 2022 meeting.
  - GN G.9 recommendations were discussed at March 2022; Committee and AEG supported targeted testing on measurement of marketing assets before final recommendation.
- Conceptual and classification consistency:
  - Members emphasized the need for conceptually sound treatments, not to be guided only by practical difficulties.
  - Importance of ensuring consistency of recommendations with the ISIC and CPC updates was stressed; ISIC update will be finalized this year and CPC update will be presented next year for adoption at the UN Statistical Commission.
- Country engagement and capacity support:
  - Global consultation engaged both balance of payments and national accounts compilers.
  - International organizations will support countries via workshops and user conferences; the IMF will assist through regional capacity development and targeted technical assistance missions.
  - The IMF’s Statistical Forum for the year will be on "Measuring the Tangible Benefits of Intangible Capital".
  - Forthcoming events noted: UNECE May 2022 Conference on update of the standards and Eurostat user conference in November 2022.
- Treatment of payments for rights to use marketing assets:
  - If status quo (treat these assets as nonproduced) is maintained, clearer guidance is needed on treatment of payments for rights to use marketing assets.
  - Slight preference expressed to treat those payments as services (the default in BPM6 if a split is not possible).
  - Large support for creating a new subcategory on the payment for nonproduced nonfinancial assets other than natural resources in the primary income account.
  - Eurostat is preparing a more general GN on rent to be discussed as part of the update process.

### Testing Exercise for GN G.9 (Marketing Assets)
- Objective:
  - To test the recommendation of treating marketing assets as produced assets by assessing whether compilers have available data sources and whether methodological guidance can be developed to calculate current production, capital stock, and consumption of fixed capital (depreciation rates/service lives).
- Timeline:
  - The testing exercise is expected to start during April 2022 and should be completed by November 2022.
- Participation and outreach:
  - From the global consultation exercise, four countries indicated they had undertaken some research: France, the Netherlands, Belarus, and the UK.
  - Economies that agreed with marketing assets being conceptually produced (potentially another 34 countries) will be contacted soon.
- Methodological and data concerns raised:
  - Some members viewed the consultation timeframe as overly optimistic to develop a decent methodology.
  - The Netherlands indicated Supply and Use Tables were the source available for their research, enabling only rough estimates.
  - The testing phase should include identification of available data sources.
  - Eurostat GFS colleagues expressed interest in own-account capital formation and which CFC costs should feed into production.
  - Tests could include full set of accounts to analyze impact on the value of equity.
  - Recognizing marketing assets as produced should utilize lessons from capitalizing R&D.
  - Costs associated with marketing assets may overlap with other assets; accounting perspective must explore valuation on the balance sheet when recognized.
  - Communication with classification community (CPC and ISIC) on potential changes is essential.
- Scope and methodological openness:
  - The exercise is intended to understand existing data availability and feasibility, not to produce a fully developed methodology at this stage.
  - The testing will ask open questions on implementation rather than dictate methods to countries.
  - There is no internationally agreed statistical methodology for producing these estimates currently.
  - The basic assumption could be a sum-of-costs approach, but other viable methods (e.g., income-based approach) may be considered.
  - Pertaining to sum of costs, a key issue is which costs to include — for example, whether advertising expenditures are a good proxy.
- Related events and presentations:
  - UNECE Expert Group on National Accounts in May 2022 will include a special session on Treatment of Marketing Assets with two presentations:
    - A presentation by an accountant from Statistics Ireland on recording of Marketing assets in IAS38 and evaluative data availability from accounting systems.
    - A presentation by Carol Corrado (US Conference Board) on work using (a portion of) advertising expenditures to estimate investment in "brand equity".

### Actions
- No action required.

### Attendees
- Co-chairs:
  - Mr. Michael Connolly (Ireland Central Statistics Office)
  - Mr. Branko Vitas (Australian Bureau of Statistics)
- Participants from countries:
  - Mr. Dirk van de Bergen and Joseph Haynes (Statistics Netherlands)
  - Ms. Ann Lisbet Brathaug (Statistics Norway)
  - Mr. Paul Feuvrier (Central Bank of Luxembourg)
  - Mr. Stefan Hauf (DESTATIS, Germany)
  - Mr. Satoru Hagino (Fukuyama University, Japan)
  - Ms. Grace Kim (Australian Bureau of Statistics)
  - Ms. Natalia Kupriyanova (Central Bank of Russia)
  - Mr. Sanjiv Mahajan (Office of National Statistics, United Kingdom)
  - Ms. Lizbeth Leyva Marin (INEGI, Mexico)
  - Mr. Dylan Rassier (Bureau of Economic Analysis, United States)
  - Mr. Jens Walter (Deutsche Bundesbank)
  - Ms. Jennifer Withington (Statistics Canada)
- International Agencies:
  - Mr. Celestino Giron (ECB)
  - Mr. Herman Smith (UNSD)
  - Mr. Rami Peltola (UNECE)
  - Floris Jansen and Daniel Iscru (Eurostat)
- Secretariat (IMF):
  - Ms. Jennifer Ribarsky
  - Ms. Padma Sandhya Hurree Gobin
  - Ms. Margarida Martins (absent)
- Unable to attend:
  - Ms. María Lourdes Erro Azcarate (Central Bank of Uruguay - Retired)
  - Ms. Yang Can (State Administration of Foreign Exchange (SAFE), China)
  - Ms. Lamia Laabar (Haut-Commisariat au Plan, Morocco)
  - Mr. Themba Munalula (Common Market for Eastern and Southern Africa (COMESA))
  - Mr. Roberto Ramos (Getúlio Vargas Foundation, Brazil)
  - Mr. Andrey Tatarinov (ROSSTAT, Russia)
  - Ms. Tihomira Dimova Rodde (UNECE)
  - Mr. Phil Stokoe (IMF)
  - Ms. Laura Wahrig (Eurostat)

### Appendix I — GZTT Research Agenda (summary of issues and status)
- High-priority items:
  - G.1 Valuation of imports and exports (CIF-FOB adjustment) — H — CATT — Awaiting final BOPCOM/AEG endorsement.
  - G.2 Treatment of MNE and Intra-MNE Flows — H — DITT — Awaiting final BOPCOM/AEG endorsement.
  - G.3 Transfer pricing within MNE group — # — DITT — Subsumed under GN G.5.
  - G.4 Treatment of special purpose entities and residency — H — DITT — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
  - G.5 Economic ownership and recording of intellectual property products — # — H — DZTT, DITT — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
- Medium-priority items:
  - G.6/C.4 Merchanting and Factoryless goods producers and recording of their transactions — M — CATT — Awaiting final BOPCOM/AEG endorsement.
  - G.7 Global value chains and trade in value-added — M — Approved and endorsed at the joint BOPCOM/AEG March 2022 meeting.
  - G.8 Typology of global production arrangements — M — Part of GN C.4.
  - G.9 Payments for “knowledge-based capital” — M — DZTT — Approved for testing at the joint BOPCOM/AEG March 2022 meeting.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/gztt/gztt-meeting-minutes-april-5-2022.pdf_